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May 15 issue:News on Avantor’s pricing of its IPO
Pricing news broken by IBO, as company prepares for $3 billion IPO
Comprehensive ranking and listing of executives compensation at the largest publicly held instrument and lab product companies

April 15 issue: “The Top 20 Companies of 2018″ Ranking of the world’s top 30 analytical instrument and lab product companies based on SDi sales and data analysis. Exclusive in-depth interviews with senior executives at 3 of the world’s largest lab product companies, Shimadzu, Thermo Fisher Scientific and Waters

IBO (Instrument Business Outlook) is a twice-monthly newsletter aimed at providing decision-makers with the latest and most complete information available on the life science and analytical instrument industry, and lab product markets. IBO delivers the latest curated industry news, information and trends, as well as SDi data and analysis to deliver the maximum in industry insight with a minimum time investment for executives and investors.

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The 2019 J.P. Morgan Healthcare Conference (JPM) has ended. Nearly 500 companies from biotech, pharma, insurance, hospital systems and more gave investor presentations to more than 9,000 attendees at the Westin St. Francis hotel this year. The size of the conference suggests that the decision as to what the investor conference and related product showcases were “about this year” could be seen in many forms, and numerous media outlets will describe the show’s focus in different ways. Kalorama attended the related Biotech Showcase event and the Digital Medicine and Medtech Showcase, with an eye to in vitro diagnostics, analytical testing and biotechnology. While there were hundreds of companies involved, a several developments were worthy of note:

“Drugs for an underserved liver disease class, continued liquid biopsy development, generic biologics, smokeless tobacco abuse, a new chip to improve reads and run lengths for NGS and many company updates were on Kalorama’s radar at the 37th J.P. Morgan Healthcare Conference. “

FDA Looks to Biosimilars for Pharma Price Reduction: Food and Drug Administration head Scott Gottlieb, MD, delivered a keynote address at the conference. The Trump Administration’s views on drug pricing has been known, but the FDA Director made it clear that competition would be the method. Among Dr. Gottlieb’s stated goals for 2019 is a reduction of drug prices through competition. “If we bring more products to the market, that will then promote price competition,” he said. In another effort to bring down drug prices, Gottlieb said that Hatch-Waxman took many years to build a generics market and the same would be true of biosimilars. He said that rebates are an impediment to the market and causing a slower uptake than expected. (Kalorama Information’s report on Biosimilars here: https://www.kaloramainformation.com/Biosimilars-Global-Trends-Competitor-11277551/)

Bruker Sees Clinical Proteomics Revenue Growth: Bruker updated on its MALDI Biotyper, a system used for microbial identification, that is viewed as a success story for clinical proteomics. The firm has an installed base of around 3,200 Biotyper systems around the world. And while sales growth for the system has slowed to the high single digits, Bruker said half the revenues are from consumables, growing at a much higher rate. The SepsiTyper product for bloodstream infections has been launched in Europe, and the firm is planning trials this year in advance of a filing for marketing clearance from the US Food and Drug Administration. With Bruker’s acquisition of Hain Lifescience in August 2018 they added assays marketed for tuberculosis, sexually transmitted diseases and HIV, and have a pipeline of assays they are developing using Hain’s Liquid Array format. (Kalorama Information’s Clinical Mass Spectrometry report is here: https://www.kaloramainformation.com/Mass-Spectrometry-Clinical-10554966/

Konica Minolta Provides Ambry Update: Konica Minolta said that Ambry has now run more than 1.5 million genetic tests and receives orders from 11,000 clinicians and more than 4,000 institutions per year. The tests that Ambry runs are in-network with around 95 percent of the insured population, and its CLIA-certified, CAP-accredited lab has the capacity to process 3,000 samples per day. In addition, he said, the firm runs a translational genomics lab that can conduct variant classification. CEO Dr. Aaron Elliott noted that for one class of variant – splice site variants – RNA testing was able to reduce the number of variants classified as being of unknown significance to 8 percent from 92 percent. (Kalorama Information’s report on Clinical Lab Services is here: https://www.kaloramainformation.com/Clinical-Laboratory-Services-10702756/)

$115 Billion in China Biotech Investment Last Year – At the China Biotech Showcase that kicked off the week of healthcare investment and product launches, the impressive growth in life science investment in China in 2018 was noted, an increase from 2017. ChinaBio, a leading Shanghai consulting, financial and conference organizer, indicated in a report that the China life science segment continues to grow:

$43 billion raised for new VC/PE funds targeting China life science investments, with average fund size increasing to $765 million;

$17 billion invested in China life science companies, up 36% from 2017, with another $8 billion in corporate investments;

$34 billion in value created in M&A deals, 53% higher than 2017, with average deal value exceeding $200 million;

$7 billion in IPO funding, an increase of 40%, with an average raise of over $250 million;

$14 billion in partnering activity, up 75% from $8 billion in 2017.

China/US Relationship Troubles a Worry for Biotech? The previously mentioned report from ChinaBio also said that “the trade relationship between the US and China is dealing with considerable unknowns as President Trump seeks concessions from China and, especially, greater IP protection for high-tech US companies operating in, or operating with, China.” The news dominates the headlines, and as a result, it comes up in year-end reviews. This emphasis in year-end reviews may be misleading. So far, no US-China cross-border biopharma deals have been rejected – by either side. The report also notes that one Chinese investor has participated in 41 US biotech deals this year with a total value of $2.6 billion. (Kalorama Information’s report on the IVD Market in China is here: https://www.kaloramainformation.com/IVD-China-11585700/)

“Despite news stories with dire predictions, so far, no US-China cross-border biopharma deals have been rejected – by either side.”

Thermo Fisher Scientific Grows on Consumables, China: Thermo Fisher’s CEO Marc Casper presented at the conference, noting that 2018 revenues were more than $23 billion, with 52 percent coming from consumables, 26 percent from instrument sales, and 22 percent from services. China, Casper said, “continues to be the fastest growing end market,” with sales to that region representing around 10 percent of total revenues. He said that demand from China has not slowed down amidst the trade war between China and the US, adding that because most of Thermo’s products are not made in the US, they are not subject to the tariffs.

Other Presentations

Kalorama Information attended numerous presentations and meetings with companies. The following was found:

Preventing Opioid-Related Endocarditis: Patients with opioid abuse problems have a high rate of endocarditis due to the sharing of needles and the resulting staff infections. A North Carolina study showed that 47% of patients with endocarditis have opiod abuse issues. (https://www.medpagetoday.com/publichealthpolicy/opioids/76669)

CytoSorbents, a New Jersey-based, critical care immunotherapy company, presented at the meeting. The company makes the only approved extracorporeal cytokine adsorber in the European Union, designed to reduce the “fuel to the fire” of deadly inflammation often seen in critically-ill patients in the intensive care unit (ICU) and those undergoing complex open heart surgery. Examples of this “fuel” include: excessive cytokines, bacterial toxins, activated complement, plasma free hemoglobin, bilirubin, and a host of other inflammatory mediators. Their product is a highly porous polymer bead system that acts like a sponge. The company said their product has helped stabilize patients with endocarditis with fewer complications by reducing excessive cytokines and toxins.

“Their product is a highly porous polymer bead system that acts like a sponge. [helping to]…stabilize patients with endocarditis with fewer complications by reducing excessive cytokines and toxins.”

Using CBD for Smokeless Tobacco Addiction: Smokeless tobacco is one of the most potent ways of consuming nicotine. Thirty minutes of smokeless tobacco is like smoking 3 cigarettes, and though smoking is down, smokeless tobacco is up. Among youth, and among military personnel, there is an increase in the use of smokeless tobacco. CV Sciences, a consumer products and pharmaceutical cannabidiol company, presented at the Biotech Showcase meeting. The company’s CVSI-007 combines nicotine and cannabidiol to support smoking cessation. Why combining nicotine and CBD? The company said their product can be 10x as powerful as tobacco but lasts longer, which reduces the need for re-dosing. Ten million Americans, it is estimated, use smokeless tobacco. “The FDA has taken a serious interest in cannabidiol from companies including our own with rigorous science.”

“Ketamine-Like” Oral Formulation: Ketamine is more effective than many anti-depressants on the market, but is a drug that so far must be clinically administered. Vista Gen presented at Biotech Showcase with an oral formulation that they say has effects like ketamine. Their AV-101 oral treatment has FDA fast track designation. The company says the drug inhibits the receptor more like a “fine tuned thermostat,” where ketamine works in a more indiscriminate fashion, blocking the receptor function but with side effects. Key clinical data readouts will follow in 2019. In an NIH-sponsored study ongoing at NIMH CSF, AV101 will be measured.

Using mAbs against Hospital Infections: While oncology has made use of monoclonal antibodies for at least two decades, in the treatment of infectious disease, these functions are not common and reimbursement is challenging. This is something Aridis, and its VAP Targeted Adjunctive Immunotherapy, would like to change. The company, which presented at Biotech Showcase as part of the J.P. Morgan Healthcare Conference, believes they can use high hospital costs to get their product into major usage. Ventilator-associated pneumonia (VAP) costs 35,000-45,000 in ICU ventilation and hospital days. The company also noted that improved knowledge, too, may play a role in the use of an immunological approach to infectious disease. While antibiotics enter the bacteria to attack it, mAbs do not. It’s now known that they preserve microbiome and do not target metabolic functions. Yet they still lead to bacterial degradation. Per the company, with the increase in availability of rapid diagnostic tests, broad antibiotics will fall out of favor. The company has an ongoing Phase 3 Global Clinical Study of its candidate AR-301 (first patient in January; 105 sites in 18 countries; testing its product vs. an antibiotic). The company has raised 130 million dollars through venture capital and non loan grant funding. The company also has a gram negative AR-105 mAb and an AR-501 for cystic fibrosis. (Kalorama Information’s report on What’s Trending in Monoclonal Antibodies: www.kaloramainformation.com/Trending-Monoclonal-Antibodies-Structure-Target-Indication-11440829)

“Clean” Kinase Inhibitor: FLT-3 kinase is a key driver of AML (acute myeloid leukemia) but many existing drugs are not effective. They are “dirty” in that they attack more than the intended target in the human kinasome. Aptose Biosciences discussed their C6-806 orphan drug designated candidate C6-806, a pan FLT-3 kinaser inhibitor for AML. The drug was found to be non-toxic in 600 mgs/kg in murine trials.

Alzheimer’s Therapy Moves: The conference is important because it has become a central time and place for announcements biotechnology companies may have had in the works. This year proved no exception as Biogen announced a major deal in regards to Alzheimer’s therapy, as noted in this endpts.com article: https://endpts.com/joining-forces-with-skyhawk-c4-therapeutics-biogen-buys-more-shots-on-goal-on-sma-alzheimers/. In two deals announced on Friday, Biogen said it is partnering with Skyhawk Therapeutics to explore small molecule RNA splicing modifiers for spinal muscular atrophy and signing on C4 Therapeutics to research the application of protein degradation tech in Alzheimer’s.

“Biogen announced a major deal in regards to Alzheimer’s therapy, Vista Gen has FDA fast track for a ketamine-like oral formulation, while CV Sciences aims at treating smokeless tobacco addiction with CBD.”

Smartphone Headache App? BioTrak Therapeutics has developed the first preventative therapeutic smartphone app for migraine and headache, Ease™. The app provides the same clinically proven, behavioral interventions traditionally only available in an office setting. The company says the Ease app addresses both the physical and psychological factors of migraine disease and tension-type headaches. Its content is based on clinically validated approaches with the aim of allowing users to self-manage their headaches. The app provides physiological therapy, including diaphragmatic breathing exercises to help patients build a healthier autonomic nervous system. Psychological support to manage stress, anxiety and depression is provided with audio-based relaxation and meditation exercises. A machine learning algorithm adjusts the user’s personalized support based on lifestyle and disease profile. The company said that a 28-day clinical study has shown Ease to successfully reduce the symptoms of migraine and frequently recurring tension-type headaches, matching the literature results shown in over 100 clinical studies on 3,500 subjects in office settings.

Other links and notes –

Myriad Grows on New Products, with an Emphasis on Depression: Myriad Genetics said that their growth has come from new products. In fiscal year 2013, less than 1 percent of testing volumes were from new products; that is now 76 percent.

Luminex/Verigene II MDx System: Luminex said it is about to finish a clinical trial initiated to validate its Verigene II MDx system along with an enteric assay. The firm anticipates submitting the results of the trial to the US Food and Drug Administration with a view to obtaining marketing clearance. The company said the Verigene is a fully automated, sample-to-result system with a much smaller footprint, an easier-to-use interface and the ability to run assays at room temperature, which saves on refrigeration and shipping costs. (https://seekingalpha.com/article/4232643-luminex-lmnx-presents-annual-2019-jp-morgan-healthcare-conference-slideshow)

PerkinElmer: The company acquired Swedish startup Vanadis in 2016, which had been developing noninvasive prenatal testing technology that did not rely on either next-generation sequencing or microarrays, and last year began collaborating with the Women & Infants Hospital of Rhode Island to test the Vanadis platform on samples from around 2,650 women. Prahlad Singh, PerkinElmer’s president and chief operating officer, said that data from that study is expected in the second half of the year. (https://seekingalpha.com/article/4232586-perkinelmer-pki-presents-37th-annual-j-p-morgan-healthcare-conference-slideshow)

From a credit card-sized clinical chemistry system to a spectrometry-based monoclonal measurement system, to phages that eat harmful bacteria, there are some interesting developments at the upcoming Biotech Showcase meeting that the Kalorama team is excited about that could directly or indirectly impact the clinical diagnostics markets.

“JPM Week” will begin next week in San Francisco. The event has become a significant launch pad for new products and start-up companies, and a place where large concerns discuss their results and future plans for curious investors and journalists. Kalorama Information will be there, previewing new innovations and speaking with customers at the related Biotech Showcase at the Hilton Union Square, January 7-9.

The Science and Medicine Group (parent company of Kalorama Information) is looking forward to the JP Morgan HC Conference, BioTech Showcase, and Digital Medicine Showcase next week in San Francisco. If you will be attending, reach out to our team to discuss how we can support your 2019 objectives in life science, clinical Dx, imaging, and radiation therapy with our commercial services including product promotion, market sizing, business intelligence, M&A advisory, and pricing-product launch. Reach out to our attending team: Craig Overpeck, Bruce Carlson, and Brian Casey (#jpm19).

The meeting comes amid good news: according to Biotech Showcase’s survey, a majority (65 percent) of life science investors and executives expect to see an increase in investment during 2019. Biotech leaders think cell and gene therapy are poised to have the biggest breakthroughs in 2019 among the major categories. China is predicted to see the biggest percentage increase in 2019 biotech investment dollars compared to other global biotech hot spots. Kalorama Information has a principal diagnostic focus, and our team has taken note of the following developments:

CBC and CMP Testing on a Credit Card-Sized Device?

That got our attention. Getting point-of-care (POC) right has been a goal for healthcare for some time, and every serious advance is worth watching. Chronus Health will present at the meeting; their credit card reader-sized instrument and credit card-sized test strip are their main offerings. A complete blood count (CBC) is a routine but critical test. Red blood cells, which carry oxygen among other important functions, can disclose a wide range of disorders including anemia, infection, and leukemia. Comprehensive metabolic panels (CMPs) are on the more complex side of routine testing and offer a lot more information. While the devices still need clinical testing and approvals, the possibility of both on a POC device is intriguing. The company’s technology replaces chemical testing, and does so without optical sensors or microfluidics.

“A majority (65%) of life science investors and executives expect to see an increase in investment during 2019.”

Chronos uses electrical measurements and pumps with electrostatic forces. Their technology does not require optics (for measurements), reagent bottles (for storage), or pumps (for moving liquids). The entire analysis happens on a disposable test strip where sample preparation, fluid movement, and sensors are embedded. The company says the technology will be in place in 2020 and will cost $400.

Using Microphages to Get Around Antibiotic Resistance

– Antimicrobial Resistance (AMR) is a major problem in all healthcare systems and a major expense for hospitals. Microphages that attack pathogens specifically instead of broadly affecting a range of pathogens have been known for many years and have received passing interest. That interest will increase in 2019 as the stakes of AMR increase. There are two companies of note presenting at Biotech Showcase. Adaptive Phage Therapeutics (APT) announced it has entered into a collaboration agreement with the Paul Turner Lab at Yale University to manufacture and supply therapeutic bacteriophage (phage) for use in clinical trials. Through this collaboration, APT is committed to leveraging the exquisite specificity and potency of phage in the fight against the global rise of MDR infections. The company maintains an automated companion diagnostic systems capability of rapid matching of a patient’s bacteria to the world’s largest collection of therapeutic phage, what the company calls PhageBank. Another microphage-related concern, Phagelux, Inc., will also present at the Showcase. The biotechnology company signed an agreement with Johnson & Johnson Consumer, Inc., in 2017 to collaborate on the development of one or more skin care products. The company’s HumanHealth intellectual property revolves around sustained release microencapsulation technologies that the company adapts to different therapeutic problems.

Smaller-Than-a-Penny Dx and Treatment Devices?

These days, it might be possible to imagine a sensor that can be the size of a penny. But how about a sensor that can fit on the mint date on the penny? This is the promise of iota Biosciences. iota holds exclusive license to millimeter-sized, ultrasonic-powered bioelectronic devices developed at UC Berkeley. Also known as “neural dust” because of their small size and ability to interface directly with the central nervous system, these battery-free implantable devices empower doctors to safely get closer than ever to the internal causes of disease. The devices are powered by ultrasound. Per the company, the platform enables production of devices the size of a grain of sand that avoid the dangers associated with wire- and battery-powered implantables. Because they are smaller and can be implanted deeper into the human body than traditional technologies, neural dust can interface directly with specific nerve clusters, enabling more precise diagnostics and treatments. iota’s devices can simultaneously record information and stimulate nerves, offering near instantaneous closed-loop therapies that could better treat complex disease from the inside out.

Cannabis-Related Companies

– A product that has been locked away for decades is now available, and it can be expected to be featured at Biotech Showcase as anywhere. CV Sciences, Inc., makes Cannabidiol – CBD – a cannabis compound that has significant medical benefits, but does not have physiological effects associated with use of the product as a drug. The company operates two distinct business segments: a drug development division focused on developing and commercializing novel therapeutics utilizing synthetic CBD and a consumer product division focused on manufacturing, marketing, and selling plant-based CBD products. GW Pharmaceuticals plc, a biopharmaceutical company focused on discovering, developing, and commercializing novel therapeutics from its proprietary cannabinoid product platform, announced that GW’s CEO Justin Gover will present a company update at the J.P. Morgan 2019 Healthcare Conference. For market information on cannabis related analytical instrumentation, see Strategic Directions International’s report: https://strategic-directions.com/cannabis-testing/.

Measuring mAbs

Monoclonal Antibiodies are effective for testing and therapeutic purposes, but they need to be created and once created, measured to be sure the desired mAb is indeed produced. Forced degradation studies, for example, are needed to test mAb-based products for conditions including high temperature, freeze-thaw, high pH, low pH, light exposure, and glycation. IonDx uses an electrospray ion mobility spectrometer to provide customers with a rapid means of surveying not only intact mAbs, but their non-specific aggregates and other higher order structures formed in solution.

Liquid Biopsy Updates

– Guardant Health has emerged as one of the leading liquid biopsy companies, and so watching what the company does is one way of assessing the performance of the sector. Kalorama will have a report on liquid biopsy this year – our schedule is here. Guardant has launched multiple liquid biopsy-based tests, including Guardant360 and GuardantOMNI for advanced stage cancer patients. The company says that since launch Guardant360 has been used by more than 5,000 oncologists, over 40 biopharmaceutical companies and all 27 of the National Comprehensive Cancer Network centers. Guardant Health developed 500 gene test GuardantOMNI in partnership with several leading pharmaceutical companies. The company is expected to update its performance, clinical results, and development of its programs for recurrence and early detection – LUNAR-1 and LUNAR-2, respectively. Trovagene is another established precision medicine player presenting at the meeting. The company has intellectual property and proprietary technology to measure circulating tumor DNA (ctDNA) in urine and blood to identify and quantify clinically actionable markers for predicting response to cancer therapies. Trovagene offers its PCM technology at its CLIA/CAP-accredited laboratory and plans to continue to vertically integrate its PCM technology with precision cancer therapeutics. Recently Trovagene announced that it has entered into an exclusive patent license agreement with the Massachusetts Institute of Technology (MIT). The exclusive license agreement is part of the company’s strategy to explore the efficacy of Onvansertib, its oral PLK1 inhibitor, in combination with anti-androgen drugs in cancers including prostate, breast, pancreatic, lung, and gastrointestinal.

“It might be possible to imagine an ultrasound device that can be the size of a penny. But how about one that can fit on the mint date on the penny?”

Aural Measurement of Neurological Issues

– Aural Analytics uses an iPhone app to analyze speech for motor and cognition changes, which can be a sign of neurodegeneration. Mobile applications empower their partners to accurately and efficiently collect information from their patients anywhere at any time. Speech, fine motor and linguistic samples are automatically uploaded to their HIPAA compliant secure cloud server where their AI engine analyzes each sample for finite but clinically relevant information and delivers results in real-time.

Concentrated Biomarker Sample Prep

– Veravas offers a novel biomarker diagnostic platform. The system, according to the company, can quickly commercialize low abundance biomarkers to meet unmet clinical needs, reduce the effects of troublesome sample interferences, and can dramatically reduce the cost of diagnostic testing. VERAPrep™ is based on a technology that selectively captures, cleans, and concentrates multiple biomarkers prior to a test. VERAPrep™ is unique because it pretreats human samples to (i) remove many complicating factors that can interfere with test results, capture low abundance biomarkers and concentrate the targets to create large improvements in sensitivity over existing methods.

Microbiome-based C. difficile Treatment

– Glasgow-based life sciences firm MGB Biopharma will present at the meeting. The firm has created a microbiome-based treatment, DNA Minor Groove Binders (MGBs), as a novel treatment method for C. diff-associated diseases. Their anti-bacterial agents interact with microbial cell DNA and interfere with its replication. MGB-BP-3 was invented at the University of Strathclyde and MGB Biopharma hopes it can go on to become a new gold standard for treatment of C. difficile – the bacteria responsible for most cases of hospital-acquired infection. The bacteria are able to take over the gut when a course of antibiotics kills off the bugs that normally live there.

Rydapt Companion Assay

Invivoscribe Technologies, Inc., recently announced premarket approval of LeukoStrat® CDx FLT3 Mutation Assay. The company says its test is the first companion diagnostic for acute myeloid leukemia and detects internal tandem duplications and tyrosine kinase domain mutations D835 and I836 in the FLT3 gene. The tool includes software that interprets data, generates mutant and wildtype signal ratios for ITD and TKD mutations, and predicts response to the drug gilteritinib fumarate (Xospata). Due to current labeling for the FDA-approved test, FLT3 mutation testing with LeukoStrat® CDx FLT3 Mutation Assay is exclusively performed by The Laboratory for Personalized Molecular Medicine, a subsidiary of Invivoscribe Technologies, Inc., which has gained FDA approval for its FLT3 test as a companion diagnostic for the Novartis drug Rydapt in newly diagnosed FLT3+ AML. Invivoscribe previously released a CE-marked IVD version of the LeukoStrat assay in August 2017.

Rare TNBC Assay in Development

Phoenix Molecular Designs (PhoenixMD) will discuss its lead program, PMD-026, the first RSK inhibitor to demonstrate potential disease-modifying properties in triple-negative breast cancer (TNBC). In preclinical studies, PMD-026 is shown to unlock the potential of tumor resistance by synergizing with chemotherapies such as paclitaxel. PMD-026 also has the potential to reprogram the way that TNBC is recognized by the immune system. The first in human clinical trial for PMD-026 is a Phase 1/1b that is scheduled to initiate in mid- 2019. Importantly, the clinical trial will include a companion diagnostic that links PMD-026 to RSK2 activation in tumors. Approximately 400,000 cases of TNBC are diagnosed every year worldwide and it is one of the most difficult breast cancer subtypes to treat due to lack of effective, targeted therapies.

Colposcopy-Enhancing Diagnostic

ZedScan is a diagnostic system that is used alongside colposcopy to provide an objective assessment of the cervical epithelial tissue in real time to enhcance detection of cervical cancer. ZedScan uses Electrical Impedance Spectroscopy (EIS) to differentiate between normal, pre-cancerous and cancerous tissue on the cervix according to its electrical properties. Zilico Limited’s CEO, Sameer Kothari, will be presenting at the annual Digital Medicine and Medtech Showcase. 2018 saw Zilico continue global expansion and growth with two investments totalling $19million for their lead product, ZedScan As part of this growth Zilico secured a strategic deal with the MaxHealth Medicine Group (China), which permits MaxHealth to sell and market ZedScan™, Zilico’s cervical cancer diagnostic system, to the Chinese market. The deal will see Zilico receive minimum royalties of $12million. In addition to the Chinese deal, Zilico has also announced investments totalling $7M from Deepbridge Capital (UK). Both investments continue to help Zilico further drive the adoption of ZedScan™ across the UK and Europe as well as taking the product through its regulatory trials in the US.

Keytruda Companion

BriaCell Therapeutics Corp.will attend the meeting. The company offers a proprietary targeted immunotherapy technology. The company recently announced the imminent clinical use of a new novel, frozen formulation for its lead product candidate, Bria-IMT™, which is currently being tested in a Phase I/IIa clinical trial with pembrolizumab [KEYTRUDA®; manufactured by Merck & Co., Inc. The company is also promoting its BriaCell’s recent clinical and research-focused development of Bria-IMT™ and BriaDX™, the corresponding companion diagnostic which helps identify those patients most likely to benefit from Bria-IMT™ and Bria-OTS™.

BIOMEDevice meeting in San Jose, CA completed its first day yesterday, with hundreds of medtech companies in attendance and exhibiting products ranging from tubing, to sensors display systems, IVD tests, plastic casing and intricate components. Kalorama presented the keynote speech at the meeting: ‘IVD: Fast Growth, Market Opportunities, New Products and Disruptive Trends’ We identified how the $65 billion-dollar market is growing to $78 billion in 2023. Which is a large market that has attracted competition. But the actual size of the market belies a large influence the healthcare market as a whole, as IVD touches pharmaceuticals, hospital services, healthcare IT, biotech instrumentation and other markets. The market size and forecast came from Kalorama Information’s The Worldwide Market for In Vitro Diagnostics, 11th Edition.

“IVD Influences a 2.6 Trillion-Dollar Market when pharmaceuticals, healthcare delivery, IT and biotech instrumentation is considered.”

-Kalorama Presentation @BIOMEDevice2018

IVD was noted for affecting key issues in the healthcare system, For instance, opioids may not seem like a problem solved by testing – but increasingly lab clinicians are being advised to work with physicians using DOA immunoassays or even advanced mass spectrometric-based tests that can identify specific substances and determine the best pain medication prescription strategy. Another issue is globilization and climate change that may influenced increase West Nile infections and the appearance of chikungunya virus for the first time in the United States several years ago. In our presentation we focused on anti-microbial resistance. Strategies aimed at getting faster test results and determining if an infection is truly present can reduce wasteful prescriptions of antibiotics for patients with viral infections. There are many ways testing can combat anti-microbial testing; it is not always the obivous search for a particular pathogen. Tests for related pathogens and point of care molecular systems, in urgent care and retail clinic uses can also reduce errant prescriptions. In addition, faster blood culture through improved automation systems (bioMerieux and BD offer representative time-reducing systems).

“AMR represents a place where IVD can rightly place its flag. It has a role in solving the problem and it is likely lack of testing that contributed to it.”

In other findings, Kalorama noted that point of care testing was in a ‘slow burn’ of adoption. Some laboratories were using more, a median of 10% more, according to surveys of laboratories by sister company IMVInfo in a recent webinar: Disruptive Trends in the Lab Industry.

What IVD Needs

There will be between 60 and 80 significant technology acquisitions or M&As completed in the next year, Kalorama notes. So what do mid to large IVD companies want from start ups, technology innovators and contractors? There were a number of improvements the IVD industry needs from smaller innovators like those exhibiting and attending:

Biosensors A Meeting Focus

– Zimmer and Peacock’s Sensor can work directly or continually, for varying applications –

Kalorama’s presentation focused on, among several trends in the market, the need for better biosensors to make future diagnostics, wearable/IVD connections, and robotics-based work. This was also a focus of the BIOMEDevice meeting, where several innovative sensor products were on display:

Sweat Sensors: Zimmer and Peacock’s Glucose sensors can be used either for discrete measurements and disposed of after use, or it can be left in place for continuous measurement. The company offers potassium, pH, nitric oxide, lactate, oxygen and uric acid sensors,, among others.

“Noise Cancelling: for Sensors: Valencell developed wearable biosensors that continuously measures heart rate, VO2, energy expenditure, R-R interval, signal quality and other biometrics. The company said that their active signal characterization technology enables highly accurate biometrics in wearable devices even during vigorous activity. Active signal characterization is a term to describe the process of actively identifying and characterizing different types of raw signal data from the biometric sensors found on many wearable devices today. According to the company, active signal characterization is similar to Active Noise Cancellation in headphones, but for biometric signals being generated by the sensors in wearables of all kinds, including smartwatches, wristbands, earbuds, or other systems.

Thin glass-based sensors: Samtec displayed its microelectronic systems consist of glass that is coated with a metalic layer. This helps miniturization and makes them highly reliable.

Sensor companies were part of a “Hot Topics in Sensors” seminar held at the Center Stage at the meeting, which discussed the progress on sensoring technology and the challeges of powering systems. Implantable and ‘Disappearable’ Sensors were discussed. Other seminars focused on unmet need in minimally invasive surgery, information technology in devices and AI-based medtech.

“How sensors might be powered, solar power or passive power, were discussed. Moving from ‘Implantable’, which can have a negative connotation, to ‘Disappearable’ so it is seemless to the user was explored at the seminar. “

Food safety concerns are increasing globally as international food trading is growing at a fast pace. Industrialization of food consumption is another major trend in many countries including several emerging markets, which in turn is pushing the growth of international food trading. The rising middle-class population demand for convenient foods such as packaged, ready-to-eat and ready-to-cook types of food is the main driver of the growing food industrialization trend globally. These market trends have created a high demand for ensuring safety in the entire food supply chain, one of the major challenges today for food manufacturers who are trying to balance the cost for complying with stringent regulatory requirements in various markets in the highly price sensitive food industry.

Food safety awareness and precautionary actions are increasingly becoming important for food processors to survive in the food industry. Foodborne diseases are major concerns even in developed markets such as that of the US, in spite of having well-established regulatory systems. For example, according to the Centers for Disease Control and Prevention (CDC), 1 in 10 people fall sick due to foodborne illnesses every year. The average financial toll due to food recalls is estimated to be $10-15 million for a large-scale food manufacturer if the company’s products are found contain contamination or labelling noncompliance. The cost can be much higher depending upon the severity of the safety issue.

There is an increasing focus on prevention strategies by both the food industry and regulatory agencies globally to avoid food-related health burden and related recalls. This is creating a significant demand for fast and accurate food safety testing technologies. Food companies are becoming more open to investing in effective testing platforms and integrating them with their food manufacturing processes. Regulatory systems are also insisting on precautions to prevent rather than merely react to incidences of foodborne illnesses.

Based on our recent assessment, the global food safety testing markets are expected to grow at a CAGR of 7% from $12.5 billion in 2018 to $17.5 billion in 2023. One of the main driving factors for this growth is the increasing focus on food safety by all key stakeholders in the food supply chain as a result of the US FDA’s Food Safety Modernization Act (FSMA), which even demands that importers be responsible for the food they bring to the US market. Other countries are following the suit and are making necessary modifications to their existing regulatory landscape so that prevention is given prime consideration. The positive impact such measures are making in terms of protecting public health is becoming evident.

For example, the ISO Cooperation Agreement Program (ISO CAP) initiated by FDA as a part of FSMA to increase its analytical capacities to ensure safety was instrumental in preventing a potential foodborne outbreak due to Listeria monocytogenes contamination in 2015. The Nebraska Department of Agriculture (NDA) was conducting routine inspection on Jeni’s Splendid Ice Cream in conjunction with the ISO CAP Accreditation program and happened to detect the deadly bacteria in the ice cream samples. NDA took quick action by compiling and tracing previous results, though those results were not as detailed as the ISO testing result, which had multiple and stricter criteria. NDA and Jeni’s quickly recalled all the batches of the product and thus prevented a potential outbreak that could have become serious. This is a classic example of how FSMA could be effective, preventing rather than responding after outbreaks have occurred.

While traditional microbiology-based testing account for a large share of the food safety testing markets in terms of the number of tests conducted, mainly in the pathogen and quality indicator (QI) organisms testing segments, the market size for this segment by value is lower than other technology segments such as immunoassay-based, molecular-based and chemistry analyzer-based segments. Immunoassays accounted for the largest market share of the global food safety testing markets by technology type, while molecular-based methods are expected to have higher growth rate, at a CAGR of 8.7% during 2018-2023.

In terms of contaminant type, pathogen testing accounted for over 30% of the market share. However, the fastest growing segment is forecasted to be GMO testing, in line with the increasing demand for Non-GMO labelled food globally. Many food companies are intent on tapping this market opportunity as it can fetch premium pricing options for them. The unprecedented growth of a health-conscious middle class all over the world is a major factor that is expected to create a fast-growing demand for effective GMO testing platforms, which are mostly depending upon relatively expensive molecular-based methods.

Residue testing accounts for the second largest segment of food safety testing markets mainly due to the increasing focus of pesticide and veterinary drug residues testing in major APAC countries such as China, India, ASEAN, etc.This segment is forecasted to grow at a CAGR of 6.7% during 2018-2023.

In terms of food type, the processed foods segment is estimated to account for the largest share, closely followed by the meat, poultry & seafood segment. These are expected to grow at CAGR of 6.2% and 7.2%, respectively, during 2018-2023. The dairy products segment is also growing fast at a CAGR of 7% during 2018-2023.

Regionally, the North American market is estimated to be the largest regional market, followed by that of Europe. APAC is the fastest growing market, which is forecasted to grow at a CAGR of 8.6% during 2018-2023. Emerging markets in the Rest of World segment, including the Middle East, Brazil, South Africa, etc., are also showing an increased focus on food safety testing as the number of foodborne illnesses increase. The recent Listeriacontamination of cold meat-based processed foods in South Africa, which led to 180 deaths, is a typical prompt for increased food safety concerns in markets as processed food demand is grows. The product recall-related financial loss is another factor that leads to increased awareness of food safety issues. A recent ban of poultry exported from Brazil by many of their targeted markets, including that of Europe, due to Salmonella contamination is another example of how food safety awareness is becoming an important factor for the survival of businesses in the food industry.

1 Another Year of “Prove to Play” for Tests– Yes, your new 2019 diagnostic test product will be effective, logical and popular with users. But Kalorama Information notes that even the most logically useful tests — such as tests that avoid high-cost treatments on patients — will still need to address scientific proof. “While it would seem that companion and precision would be ‘money well spent,’ in reality there is a major breakdown of the system in too many cases.” said Melissa Elder, pharmaceutical and IVD analyst for Kalorama Information. “The decision for payor approval for diagnostic testing comes from strong, even overwhelming, scientific evidence that the testing will have a direct impact on outcomes and in many cases this is difficult to show meaningful benefits.” The question asked will be- if the test is performed prior to initiating treatment is there a significant improvement in clinical response and outcomes over those that do not have pre-treatment diagnostics?

2. Watch Liquid Biopsy – Imaging Pair Ups in 2019: Liquid Biopsy will see gains in acceptance, but there are challenges. This recent article in Nature sums up some of them: https://www.nature.com/articles/s41576-018-0071-5. Difficulty with collecting enough relevant sample from patients, and enough CTCs or cfDNA in samples is an issue. Also IT difficulty and cost, need for better error correction, magnitude of interpretation. To varying degrees progress will be made on these fronts, because the promise of non-invasive technologies is a winner. But Kalorama Information thinks that in 2019, its most interesting use will be as a complemntary tool, assisting other tests. For instance imaging studies, liquid biopsy has been shown to reduce false negatives when used in conjunction with imaging tests. A 2018 study published in Translational Oncology demonstrated that a combination of liquid biopsy and radiological imaging enabled visualization of the occurrence of clonal redistribution after discontinuation of anti-EGFR mAb therapy, as well as emerging RAS mutations during therapy with anti-EGFR mAb indicating resistance.

3. Hungary, Romania and Eastern Europe Shine in 2019: Clinical diagnostics and analytical instrument companies both are seeking emerging markets for growth. Eastern Europe is gaining attention as a reachable market with promise.

Hungary has become interesting for the sale of analytical devices as it is increasing helathcare R&D spend. According to Instrument Business Outlook. https://instrumentbusinessoutlook.com/hungarys-rd-spending-shows-significant-gains/ R&D spending is rising on a global basis. In 2016, estimated spending for the 34 countries that make up the OCED grew 2.3% to $1,266 billion at current prices and purchase price parity (PPP). At well above this growth rate, Hungary made tremendous gains in R&D spending in 2017, according to figures released last month by the Central Statistical Office. Hungary’s 2017 R&D spending grew 21.1% to HUF 517.258 million ($1,811 million at 285.6 = $1 ). Between 2016 to 2017, the country’s R&D as a percentage of GDP rose from 1.20% to an estimated 1.35%. Meanwhile Kalorama Information noted in its recent IVD study that Hungary continues to expand its private health market which currently represents about 38% of spending. Hungary’s health spending represents about 7.5% of GDP, or $21 billion annually.

Of particular note is histology spending which Kalorama estimate will grow 8% each year in the next five years, as Hungary addresses lung and breast cancer patient populations. Romania is another growth country for clinical diagnostics, with growth rates of 10% in histology testing and nearly 5% in overall IVD spending. Both countries are dealing with higher than regional and European rates of breast and lung cancer. Romania which continues to develop its action plan for diabetes and bring prevalence rates down from the current 12.4%.

4. If You Want to Sell a Laboratorian in 2019, You’ll Have to Network: Laboratorians generally have a closer, in-person social network that they rely on for recommendations, advice or information about products and services. That’s according to IMVInfo’s “2019 Trends in Marketing to Clinical Diagnostic Labs.” (https://imvinfo.com/product/marketing-to-clinical-diagnostic-labs-report /). The report cites credibility factors and buying habits among laboratorians, what influences them, what sites they use and how best to approach laboratorians.

5. Revenue Decreases at Labs, Lab Consolidation and Pushback on Vendors: The impact of PAMA and resulting Medicare Part B cuts on testing is being felt. 2019 will bring more pressure on spending and consolidation for lab customers. And that means downstream impact on IVD vendors. A survey from IMV Info indicated that most labs have seen decreases. 55% of a panel of 110 labs indicated they had revenue decreases, from single digits to double-digits as a result of Medicare Part B cuts, and that over 60% will “review agreements with vendors for instruments and reagents.”

6. Clinical Sequencing Gains Crucial Popular Support: More than any other diagnostic tool, the sequencer is set up for popular recognition and eventually demand. Sequencing Scored some wins in 2018: An October 2018 study of participants a recent Clinical Sequencing Exploratory Research (CSER) Consortium program found that reporting incidental sequencing results generally did not cause undue distress or other adverse impacts on patients. It also found that reporting these results lead to only modest costs for medical follow-up, at least within the first year. Other good news comes from the BabySeq project, where a population of newborns were testing has revealed the possible utility of broad sequencing of populations. One anecdote that has gained traction is of the baby who was discovered to have a BRCA2 mutation, meaning they would be at high risk for developing breast or ovarian cancer as an adult. The knowledge of that mutation was not actionable for the baby at that moment, which raised the question of whether it should be reported? As a consequence, the mother got tested and discovered she, too, has the BRCA2 mutation. If the mother now has a better chance of avoiding or surviving cancer, it benefits the whole family.

One of the fastest growing areas of clinical sequencing has been in cancer diagnostics, which has only intensified since the CMS decision in March 2018 to offer national coverage for NGS testing in advanced cancer patients. Research presented by at the American Society of Human Genetics meeting in October 2018 suggested that clinical sequencing could also be helpful for pediatric cancer patients. Although the researchers didn’t examine survival outcomes, they reported that in a sample of 253 pediatric cancer patients who had whole genome or exome sequencing at St. Jude Children’s Research Hospital, 79 percent had at least one finding that could help guide care. We expect more of a foundation for clinical sequencing demand coming from stories like these.

7. Direct to Consumer Testing – Floodgates Open, Flood Must Wait: Patients can now access diagnostic testing without their doctor. Quest Laboratories has launched QuestDirect, an enhanced consumer-initiated testing service that empowers patients to manage and take control of their healthcare by ordering health and wellness lab testing from the convenience of their home. Walgreens and LabCorp announced a large-scale expansion of their LabCorp at Walgreens collaboration. The two companies have agreed to open at least 600 LabCorp patient service centers at Walgreens stores across the U.S. over the next four years, inclusive of the 17 locations that have opened since they first announced their consumer-focused initiative in June 2017. LabCorp at Walgreens locations are currently open in Florida, Colorado, North Carolina and Deerfield, Illinois, serving as an important part of LabCorp’s network of nearly 2,000 patient service centers across the U.S. This is in addition to 23andMe.com‘s offering of DNA testing for select BRCA variants without a doctor’s order. “2019 is the first full year the gate is open for the customer to test themselves, will demand follow,” said Bruce Carlson, Publisher of Kalorama Information. “We think they will, but some prodding, advertising, apps, social media will be needed.”

8. AI Will Be Seen as a Team Player, Not a Job Replacer: Talk of replacing doctors (or other workers) should, Kalorama Information thinks, by at least the end of 2019 be less of the discussion surrounding artificial intelligence. Instead, more attention will be on the positive supporting role that AI can play as the systems think about myriad datapoints that a human cannot always process. AI as a supporting tool, a team player. The demand is there: The Institute of Medicine at the National Academies of Science, Engineering and Medicine reports that “diagnostic errors contribute to approximately 10 percent of patient deaths,” and also account for 6 to 17 percent of hospital complications. The systems are proving out: Babylon Health claims its system performed 10% better than the average GP entrant examinee for induction into the Royal College of General Practitioners. And there’s apps: Prevencio Inc recently announced that its HART PAD test diagnoses peripheral artery disease in diabetes mellitus patients at high positive predictive value and negative sensitivity levels, in a Mass General Hospital study. These are just a few of the recent developments.

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Kalorama Information, part of Science and Medicine Group, has been a leading publisher of market research in medical markets, including the biotechnology, diagnostics, medical device, and pharmaceutical industries for more than 30 years. Our comprehensive, timely, quality research and innovative approach to analysis and presentation of market intelligence have made Kalorama Information a premier source of market information for top industry decision makers.